Local government capital spending in Indonesia: Impact of intergovernmental fiscal transfers

Blane Lewis*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

21 Citations (Scopus)

Abstract

Indonesian policymakers intend to increase capital spending, especially on traditional infrastructure, at all levels of government in order to stimulate economic growth. Intergovernmental capital grants can have very significant impact on encouraging such spending at the subnational level. The main problems with capital transfers in the Indonesian context are that grant funding has stagnated at low levels and the proportion of funding allocated to infrastructure has declined considerably. Given current institutional constraints, the likelihood of increasing grant funding for subnational infrastructure is dubious, which suggests that economic growth in Indonesia may remain suboptimal for the near future.

Original languageEnglish
Pages (from-to)76-94
Number of pages19
JournalPublic Budgeting and Finance
Volume33
Issue number1
DOIs
Publication statusPublished - 2013
Externally publishedYes

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